Gannett joins in -- splitting print off from TV/digital

Drip · Aug 11, 2014

Amy said:

LanceyHoward said:

JimmyHoward33 said:

What's the advantage of making both companies publicly traded? Is that required because of how they're currently structured? Seems like it would be more reasonable to keep the print co. private making a smaller profit more reasonable than the model that must maximize every cent of margin "for the shareholders." Or is that idea far too simplistic?
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There are at least two related reasons. The FCC cross ownershio rules and taxes.

FCC regulations generally prohibit owning a television station and a newspaper in the same market. The Tribune company and others that had a newspaper and a market in the same market were generally grandfathered.

So if Gannett, which owns the leading Denver television station, wanted to buy the Denver Post it might face issues when it goes to renew it's television license.

If that happened Gannett would be forced with selling a property that had been acquired 50 years ago and have to pay a lot of taxes.

By splitting up they avoid those issues.

One thing I wonder about is whether the newly spun off publishing companies will acquire more newspapers. There has been a lack of buyer interest in part because the parents were concentrating on television or were in Chapter 11.

For example the Tribune company owned both the Ft. Lauderdale paper and a television station. Now that these entities are under separate ownership does the Tribune company try to buy either the Palm Beach and/or Miami paper? I would think that there would be tremendous economies of scale in running one combined website,etc.
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I'll take a shot at explaining this. I don't know what Gannett's corporate structure looks like, but there's a parent company that is publicly traded. There may be actual operations in that legal entity or it may be a holding company, but in any event there are likely a bunch of subsidiaries that hold different operations. Could be a holding company that owns 100% of the stock of two holding companies - one print and one broadcast, with each of those intermediate holding companies owning interests in more subsidiaries. Whatever. None of those subsidiaries are publicly traded because they are owned by Gannett parent company. They are one big group for tax purposes and for SEC filing purposes and in determining the company's stock value.

If the print operations are going to be separated from broadcast for valuation, they have to be sold so they are no longer legally related. If they are going to be sold and not be publicly traded, some small group of investors would have to buy those operations. If there is no buyer out there, the parent company can do a "spin-off" in which an independent company is created and the shareholders of parent company get proportionate shares in the newly spun company. If the spin off is properly structured, neither the spinning company nor the shareholders will have any tax liability resulting from the spin-off.
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Thanks Amy.

HejiraHenry · Aug 11, 2014

HejiraHenry said:

I called Investor Relations at Gannett World HQ today, looking for someone to explain to me in plain English what happens next. Of course, whoever answered the phone flunked the "plain English" test, and I had to leave a message on a voice mail. I'll let you know when and if I ever get a response.
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Nice lady called back today and answered a few of my questions. First thing, it's going to take a good long while to spin off the publishing division. She said it would most likely be October of 2015. Gannett stock will comprise the broadcast and (theoretically) profitable online stuff, while a new stock will be issued for the publishing division. How much new stock and similar details - including the name of the new company - are yet to be determined, or at least yet to be revealed.

I still think I'll go ahead and shed a couple hundred shares of the current stock while it's trading in this range. Given my luck with stocks, it'll soar as soon as I unload some of it.

LongTimeListener · Aug 27, 2014

Gannet don't need no stinkin' copy editors.

http://jimromenesko.com/2014/08/27/newspaper-chain-thats-laying-off-copy-editors-misspells-its-own-name-in-newsletter/

boundforboston · Aug 28, 2014

LongTimeListener said:

Gannet don't need no stinkin' copy editors.

http://jimromenesko.com/2014/08/27/newspaper-chain-thats-laying-off-copy-editors-misspells-its-own-name-in-newsletter/
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No one truly needs copy editors. Just get your wife to read a story. [/crossthread]

PaperDoll · Jan 22, 2015

Carl Icahn might want to take over part of Gannett's now-separate divisions... and the present execs don't like it.

http://dealbook.nytimes.com/2015/01...on-gannetts-board/?smid=tw-dealbook&seid=auto

PaperDoll · Mar 12, 2015

Gannett's SEC filing related to the split was released today. The newspapers will continue to be called Gannett. The broadcast and digital division doesn't seem to have a name, but the promised dividends are significantly higher.

Gannett stock traded up 3.5 percent at the close.

USA Today: Gannett sets post-split capital plans

HejiraHenry · Mar 13, 2015

I'd been intending to sell 100 shares if the stock price ever bounced back to $40 - I'd still have a lot more in hand, although I'm no Carl Icahn - but now I wonder whether I should wait and take some cash out after the split.

Baron Scicluna · Apr 21, 2015

And the new name for Gannett's digital business is ... TEGNA.

Yes, TEGNA. As in, an anagram of Gannett, with an n and t dropped.

I wonder how much was paid out in consultants to come up with that shitburger of a name?

Oh, and if it's misspelled and comes up as Tenga, well, that's a Japanese masturbation device.

» Gannett’s broadcasting/digital company will be called TEGNA; publishing side keeps Gannett JIMROMENESKO.COM

MisterCreosote · Apr 21, 2015

Sounds like an erectile dysfunction drug.

Baron Scicluna · Apr 21, 2015

TEGNA, see a doctor if your erection is lasting more than four hours.

Bronco77 · Apr 21, 2015

Rhymes with "smegma" -- yuck!

Or "Jenga," like the whole thing could topple over.

Kato · Apr 22, 2015

An anagram, minus two letters. Genius.

Tangent is also an anagram of Gannett, and kinda makes more sense.

Also: Gnat Net, Ant Gent and Ten Gnat(s)

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Gannett joins in -- splitting print off from TV/digital

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